Purchases from gold jewelers in India stirred up physical trade in Asia, while a drop in bullion prices ignited demand from other consumers in the region and kept premiums steady, dealers said on Friday. The wedding season was over in India, the world's largest gold consumer, but local jewelry makers were now busy taking orders from customers in Dubai, where jewelry sales are mainly derived from tourists visiting the emirate. “The physical market is certainly far more active with the start of the New Year and demand is emerging in key demand centers,” said Pradeep Unni, senior analyst and trader at Richcomm Global Services in Dubai. “Sales of scrap are not high in the Gulf, and jewelry sales are buoyant largely due to an increase in tourist arrivals during the cold weather season in the region.” Tourists usually account for much of the gold sales in Dubai. Premiums for gold bars held around last week's levels of 60 to 70 US cents an ounce to the spot London prices in Singapore due to steady purchases from jewelers in India, Indonesia and Thailand. India's wedding season will start again in April after reaching its peak last month. Gold jewelry is the most common gift during religious events in India and forms an essential part of the dowry basket. “India supplies a lot of jewelry to Dubai. Physical demand from India has been quite good lately and Indonesia is buying again after being absent from the market for a while,” said a dealer in Singapore. “We see buying on a price dip and I would say trading is still in a range. At this point, we don't see much selling either,” said the dealer, referring to limited sales of scraps in Asia. Gold fell $4.05 an ounce to $1,138.10, down from a 5-week high of $1,161.50 hit on Monday. Bullion has bounced from a 7-week low of $1,074.10 struck on Dec. 22 and was about seven percent below a lifetime high of $1,226.10 seen in early December. “There seems to be bit of demand because the price has dropped from the highs around $1,200 last year. But I think people are still bullish. That's why you don't see much selling,” said a dealer in Hong Kong. Premiums for gold bars inched up to 40 to 80 US cents an ounce in Hong Kong from 30 to 70 cents last week. Weaker gold prices cut the discounts in Tokyo to 50 and 75 cents from as high as $1, but there was hardly any improvement in demand from jewelers and investors. “It's still dull in the investment sector but demand from the electronics side is quite steady,” said a dealer in Tokyo. Gold price that used to around $800 per ounce in January 2009, boomed to touch the historic high of $1,227 per ounce in November, 2009. This 10-month boom in gold price has prompted analysts to forecast that the yellow metal is further set to hit $2,000 per ounce. They recently said that he is waiting for the right opportunity to buy gold. “We will buy as and when gold price dips to $1,000 per ounce,” adding that they find great investing potential in other precious metals such as silver, platinum and palladium. They said they were delighted to see what China did because some of the real estate in China was getting into a serious bubble. “It's good for China and therefore good for most of us. They need to cool off their economy,” analysts said. “They cannot get it too strong but China does not control the commodities market by any stretch of the imagination,” they added.
